Companies: IOM   

After racking up losses of £13 million in its first two years as a public company, the much-restructured Iomart today admitted to investors that it was still only in 'start-up mode', this time as a software company. Leslie Copeland reports.

Since joining Aim in April 2000 after a £20 million fundraising, Iomart (IOM) has failed to deliver shareholder value. If its new plans are as ill-conceived as previous versions, critics argue the company should return the £7 million left in its coffers to investors.

Launched at 127p, the shares now sit at a mere 14p following the company's decision to develop and then ditch its internet service provider business madasafish.com. This was eventually sold for just £3 million cash.

Iomart then moved into the broadband telecoms arena at an inopportune moment and eventually sold this business for £2 million. The company then decided to dabble in the web mail and unified messaging businesses in Germany, an enterprise that it also had to offload following a fallout in that market.

Iomart's plan now is to eke out a living in the market for corporate enterprise security products following its purchase of Actus Technology's NetIntelligence product portfolio. It has also retained a web hosting infrastructure and customer base.

Chief executive Angus MacSween says many blue chips have shown a 'keen interest' in the company's mail software, which also includes a 'sophisticated web filter component'. But he admits the sales cycle for the product could be anything from six to 12 months.

Whether significant profits will arise from this line of work is difficult to determine, say analysts. Iomart is very small, faces stiff competition and only has a limited amount of funds to develop and market its products.

The fact that new management have been appointed to oversee Iomart's latest reinvention is somewhat reassuring. But the risks are seen as still very high.

Iomart	AIM	£36.59m	36.50p	-0.50p
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Other company articles:
Iomart			29/07/2008
Iomart			02/02/2004
Iomart enters start-up phase – again			23/05/2002
AIM report			02/04/2002
Iomart			27/02/2002